The Seven Stages of Training Outsourcing

November 28, 2012

DEFINITION

The Seven Stages of Training Outsourcing of Training Business Process Outsourcing (BPO) identifies each of the stages involved in sourcing training services and illustrates the order in which they should generally occur.

OVERVIEW

The BPO Model and the Seven Stages of Sourcing were originally created to help buyers assess their business needs and better manage the sourcing process. Buyers often struggle with the process of selecting suppliers for training services, whether due to inexperience, lack of industry knowledge or research, or poor planning. There is a high risk associated with selecting and managing suppliers; buyers can waste substantial sums of money or select a supplier that is the wrong fit for their particular engagement if this process is done ineffectively. This model allows buyers to mitigate these risks by following a structured course, where each stage consists of certain steps which can be simplified or elaborated depending on the complexity of the sourcing agreement. For example, larger, more complex deals would typically require more detail and sophistication during each stage of training business process outsourcing.

THE SEVEN STAGES

Training Business Process Outsourcing (BPO) consists of seven stages: assessment, proposal, due diligence, contracting, transition, governance and transfer. Each of the seven stages is described in chronological order below.

Assessment: The first stage of outsourcing, during which the buying company conducts a thorough assessment of their sourcing needs. Since this stage involves developing a project plan, identifying a leadership team and reorganizing training resources, it is often the most difficult.

Proposal: Once a company has decided to outsource training services, they must identify which suppliers have the capabilities to best match their needs. In order to get information from suppliers, the company will create and send at least one of the following documents to the external market: Request for Information (RFI), Request for Proposal (RFP) or Request for Quotes (RFQ).

Due Diligence: This is the process of gathering and evaluating information about each others’ capabilities in order to form a solid and structured relationship.

Contracting: This stage occurs once both parties are prepared to formalize their business relationship through a written agreement. The companies will negotiate the specific terms of their relationship and will then sign a contract, typically either a Master Services Agreement (MSA) or a Service Level Agreement (SLA).

Transition: After the contract is signed, the two companies will begin transitioning resources and responsibilities from the buyer to the supplier.

Governance: This stage is typically the longest because it involves managing the business and maintaining a working relationship throughout the duration of the contract.

Repatriation/Transfer: The last stage of outsourcing, repatriation involves the transfer of resources and responsibilities back to the original companies.

USES

The Seven Stages Model can be used as a guide for buyer and supplier side companies who plan to be involved in engagements to source training business processes.